MONEY MASTER

China’s producer price deflation softened in January, helped largely by a  global metals rally , though economists warn that a sustained reflation remains elusive without stronger domestic demand. Key Inflation Data (January 2026) Producer Price Index (PPI): -1.4% YoY Smallest decline since July 2024 Improved from -2.1% previously Consumer Price Index (CPI): +0.2% YoY Slowed from +0.8% in December Core CPI: +0.8% (six-month low) Headline improvement masks fragile underlying demand. What’s Driving the PPI Rebound? The improvement was concentrated in  upstream sectors , particularly metals: Non-ferrous metal materials: +16.1% YoY Mining & processing prices: +22.7% The rally in global commodities — especially gold and industrial metals — provided external support. However,  downstream consumer goods prices worsened , with declines widening to  -1.7% , highlighting weak household demand. Morgan Stanley economist  Robin Xing  noted that there is  “no de...

Summary UBS expects the  ringgit to strengthen towards 3.80 against the US dollar by December , potentially reaching its strongest level in more than a decade. The outlook is supported by  strong capital inflows, AI-driven investments, a resilient trade surplus, and narrowing US–Malaysia interest rate differentials . Key Points Ringgit target: 3.80 per US dollar by December , last seen in 2015 Best-performing major Asian currency in early 2026 , up over  3% YTD More than 10% gain in 2025 , extending its recovery trend What’s Driving the Ringgit Higher Sustained foreign inflows  from multi-year investments into  data centres and the digital economy Global tech and AI demand  expected to remain strong into 2026, supporting Malaysia’s  trade surplus Narrowing interest rate gap  as the  US is expected to cut rates , while  Bank Negara Malaysia is likely to stay on hold This environment encourages  USD-to-ringgit conversions by corporate...

The  International Monetary Fund (IMF)  raised its growth forecast for the  Asia-Pacific region  but cautioned that escalating  U.S.–China trade tensions  could derail momentum in one of the world’s most interconnected regions. Asia’s Resilient Growth Amid Tariff Headwinds According to  Krishna Srinivasan , Director of the IMF’s Asia and Pacific Department, Asia’s economy is expected to  grow 4.5% in 2025 , slightly down from 4.6% in 2024 but  0.6 percentage point higher than the IMF’s April estimate . Growth is projected to moderate to  4.1% in 2026 . “The region is once again set to contribute about 60% of global growth, both this year and in 2026,” Srinivasan said. Despite facing U.S. tariffs, Asia’s economic activity has remained  stronger than expected , driven by  front-loaded exports ,  intra-regional trade , and a  technology boom  led by  artificial intelligence (AI)  demand in  South Kore...

Asian markets are set for a  choppy session Thursday , tracking Wall Street’s rollercoaster performance as  US-China trade tensions intensify  and investors brace for policy and earnings-driven swings. Futures Signal Mixed Open Across the Region Equity futures in  Shanghai  and  Tokyo  pointed higher, while  Hong Kong  looked weaker and  Sydney  remained flat. The uneven setup follows a volatile overnight session in the US, where the  S&P 500 Index (.SPX.US)  swung more than 2% intraday before closing modestly higher. Traders in Asia will be watching how far the renewed  US-China trade conflict  will escalate after US President  Donald Trump  declared,  “We’re in a trade war now.” Wall Street Swings Wildly as Fed Bets Build After climbing as much as 1.2% early in the session, the S&P 500 briefly turned negative before rebounding. Treasuries : Two-year yields steadied near  3.50% , clos...

Key Takeaway:  Gold soared to record highs above US$4,000 an ounce, outperforming equities as global political turbulence and expectations of U.S. rate cuts reignited safe-haven demand. Market Recap Asset / Index Latest Move Note Gold Futures +50% YTD Record high above US$4,000/oz S&P 500 (.SPX.US) -0.4% Snapped 7-day winning streak Nasdaq Composite (.IXIC.US) -0.7% Tech weakness led declines Dow Jones (.DJI.US) -0.2% Slight retreat ORCL (Oracle) -2.52% AI profitability concerns APP (Applovin) +7.64% Tech standout IBM +1.54% Gains on cloud optimism STX (Seagate) -7.34% Weak guidance VZ (Verizon) -0.10% Flat trading Gold’s Record-Breaking Rally Gold prices extended their strongest run since 1979, climbing above  US$4,000 per ounce  for the first time. The metal has now gained  over 50% in 2025 , supported by rising geopolitical uncertainty and declining real yields. Analysts attribute the surge to multiple global flashpoints: The  U.S. government shutdown , n...

Summary: Two of the European Central Bank’s (ECB) top policymakers — Vice President  Luis de Guindos  and Chief Economist  Philip Lane  — indicated little urgency to adjust monetary policy, saying inflation risks are now balanced and current rates remain appropriate. Key Takeaways “Inflation risks are balanced,”  said Guindos, citing price trends that align with projections. “Price stability could be somehow guaranteed,” he added, suggesting  no immediate need for further cuts . Lane echoed this sentiment, saying policymakers face a choice between  holding steady or cutting slightly  if downside risks intensify. Both officials stressed a  data-dependent and cautious approach , with Guindos noting the ECB remains wary of “very high uncertainty,” despite a new US-EU trade deal. Policy Outlook After  eight rate cuts over the past year , most ECB policymakers view policy settings as  broadly appropriate . ECB staff forecasts inflation t...

  Policy Pause Amid Uncertain Outlook The Reserve Bank of Australia (RBA) on Tuesday kept its cash rate unchanged at  3.60% , aligning with market expectations. The central bank noted that recent data suggests  third-quarter inflation may run hotter than forecast , highlighting lingering uncertainty in the economic outlook. Governor  Michele Bullock  emphasized the RBA’s data-dependent approach, saying the board will reassess in November with a fuller picture of inflation, labour market trends, and updated forecasts. “That could mean a couple more reductions. It might not. I don’t know at this point and we will look at all this again in November,” she told reporters. Market Reaction and Rate Expectations The more cautious tone dampened hopes for near-term rate cuts. The  Australian dollar strengthened 0.4% to US$0.66 , while three-year bond futures slipped, reflecting diminished easing bets. Swaps now price in just a  36% probability of a November cut ...

Key Takeaway:  JPMorgan’s chief US economist  Michael Feroli  expects the Fed to deliver  two more rate cuts  while highlighting surprisingly strong  productivity growth in 3Q , supported by steady GDP, resilient labor markets, and tech-driven capital spending. The debate inside the Federal Reserve continues to heat up as policymakers weigh the pace of interest-rate cuts. While newly appointed Fed governor  Stephen Miran  has called for aggressive easing to protect jobs, the majority of officials — including  Cleveland’s Beth Hammack  — remain in favor of a gradual approach. JPMorgan’s  Michael Feroli  said Miran’s call is unlikely to gain traction unless the labor market deteriorates sharply. For now, slowing but stable hiring and low layoffs suggest a  maturing cycle, not a distressed one . “Job growth has slowed, but we’re not seeing broad-based job losses,” he noted. Feroli emphasized that despite softer hiring,  ...

Malaysia is expected to maintain its fiscal consolidation drive in  Budget 2026 , even as the economy faces moderating growth, according to a preview by  CIMB Treasury and Markets Research . Growth Outlook CIMB projects GDP growth of  4.1% in 2026 , down from its earlier 4.5% forecast, citing weaker external demand, softer consumption, and subdued investment sentiment in a post-Trump trade environment. Despite the slowdown, the government is expected to  narrow the fiscal deficit  to  –3.6% of GDP  from –3.8% in 2025, consistent with its long-term fiscal targets. Revenue and Expenditure Trends Revenue : Expected to rise 4% YoY to  RM353.3 billion , supported by: Expanded sales and service tax (SST) E-invoicing rollout and tighter compliance Higher “sin taxes” Preparations for a gradual  carbon tax  from 2027, starting with the iron and steel sector Operating expenditure : Forecast to increase 3.9% to  RM348.1 billion , partly due to...

  Key Takeaways: Dimon remains cautious on the US economy, citing the  lagging impact of tariffs, immigration, geopolitics, and fiscal policy . He warned that  expected Fed rate cuts will be immaterial  amid weakening conditions. JPMorgan is preparing for more  banking sector consolidation , while continuing its European digital expansion. Dimon’s Economic Concerns JPMorgan Chase CEO Jamie Dimon said the  full effects of Trump-era tariffs and new geopolitical headwinds  have yet to materialize, stressing that these risks often unfold over long cycles. Speaking on the  Office Hours: Business Edition podcast, he cautioned investors not to underestimate the delayed impact of tariffs, immigration pressures, and fiscal measures from Washington. “The economy is weakening,” Dimon said separately on CNBC, adding that Federal Reserve interest-rate cuts will have only a limited effect in countering the slowdown. Market and Policy Outlook While US GDP growth...

Key Takeaway:  Indonesia’s markets came under pressure after respected finance minister  Sri Mulyani Indrawati  was removed, fueling investor concerns over policy direction under President  Prabowo Subianto  amid recent political unrest. Market Reaction The  rupiah fell 1.1% to 16,482 per dollar  on Tuesday, while the  Jakarta Composite Index  dropped  1.3% . Sovereign bonds also weakened.  Bank Indonesia (BI)  confirmed it was intervening in the currency and bond markets to stabilise the rupiah. Year-to-date, the rupiah has slid  2.3% , making it Asia’s  worst-performing currency after the Indian rupee . By contrast, the Jakarta Composite is still up  9.1% in 2025 , though it lags other Asian emerging-market peers. Political Shift Indrawati’s removal comes just days after Indonesia experienced its  worst anti-government protests in years , raising fears of more populist fiscal measures. She had been widely ...

The US dollar and Treasuries weakened in Asian trading on Tuesday after President Donald Trump announced the removal of Federal Reserve Governor Lisa Cook, escalating concerns about central bank independence and rattling confidence in US assets. Trump’s Intervention Shakes Market Confidence Trump posted on his Truth Social platform that he had removed Cook on allegations of making false statements on mortgage applications. Her term, originally due to end in 2038, has now been cut short, potentially accelerating the president’s ability to reshape the Fed’s policy stance. The move underscores Trump’s increasingly combative relationship with the Fed. He has repeatedly threatened to fire Fed Chair Jerome Powell — though lacking the legal authority except “for cause.” Powell’s current term as chair expires in May 2026. “ There’s no credibility. That’s the basis of the US being the safest investment in the world. If you’re a responsible investor, it gives you pause, ” said Bart Wakabayashi, ...

  Positive Momentum Across the Region Asian equities were set for a largely positive open Thursday, with futures signaling gains in  Australia  and  Hong Kong , while Japan’s contracts pointed slightly lower. The optimism follows a second straight session of gains for US-listed Chinese stocks and a modest rise in the  S&P 500 , aided by advances in  Apple  and  Amazon . Bonds Rally as Rate-Cut Bets Intensify US Treasury yields and the dollar both retreated, marking a sharp reversal from just two weeks ago when traders saw less than a 50% chance of a September Fed rate cut. Market pricing now reflects  full expectations for a 25 bps reduction , with some positioning for a  50 bps move . US Treasury Secretary  Scott Bessent  fueled the momentum, saying,  “We could go into a series of rate cuts here, starting with a 50-basis-point rate cut in September.” Policy Outlook UBS Global Wealth Management ’s Ulrike Hoffmann-Burch...

Asian Equities Cool After Three-Day Advance Asian stocks pulled back Thursday, with the  MSCI Asia Pacific Index  slipping 0.2% as Japanese shares dropped 1.4% under pressure from a stronger yen. The yen gained 0.5% against the US dollar after US Treasury Secretary  Scott Bessent said the  Bank of Japan (BOJ)  was lagging in tackling inflation and would likely raise interest rates. Bessent’s Push for Fed Rate Cuts Weakens the Dollar The dollar fell against all G-10 peers as Bessent also urged the  Federal Reserve  to ease policy. He argued that the Fed’s benchmark rate should be at least  1.5 percentage points lower  and suggested starting with a  50 bps cut in September . His comments follow softer US inflation data earlier this week, which reinforced market expectations for a  quarter-point cut next month . Monetary Policy Outlook Fed : The FOMC kept rates at  4.25%-4.5%  in July. Analysts expect a more dovish tone in 20...